Coinone stopping withdrawals to unverified external wallets.

[condoras]

As I saw in this article from "The Block Crypto", the Korean exchange Coinone will no longer allow withdrawals to unverified external wallets. In simpler words, moving your funds to non-custodial wallets (aka the real wallets) like hardware wallets and MetaMask will not be possible.
So, this may be the start for other exchanges to put in effect such "measures" and for what purpose? To know who owns what?
Please, share your thoughts.

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[dkbit98]

So, this may be the start for other exchanges to put in effect such "measures" and for what purpose? To know who owns what?

I saw announcement that all other exchanges based in South Korea will have to do the same thing like Coinone exchange, to comply with their local laws and new regulations.
They are not the first exchange doing this, and I think that something similar happened in Europe with Netherlands, but if I remember correctly there were many complains and they removed this.
Overall I think this is just one more way for tracking people and increasing surveillance of everything they do online and offline.
Strong resistence is needed to refuse this changes worldwide, but I doubt zombified population have the will and determination to do this.

[Charles-Tim]

I wonder how South Koreans are going to send bitcoin or any other cryptocurrency to people outside South Korea. With this, it may not be possible. Yet, scammers will have there ways to scam irrespective of being a South Korean or not.

So, this may be the start for other exchanges to put in effect such "measures" and for what purpose? To know who owns what?

For surveillance reason, not caring about privacy. But this will be for those that are making use of such exchanges. People that are easily making use of noncustododial means will still have the privacy they want.

With all the government and centralized moves, scam activities are increasing.

[hugeblack]

Such conditions will not continue because when you deposit cryptocurrencies, you are depositing them from addresses that cannot be controlled.
The service will be closer to what PayPal did, where you cannot withdraw your cryptos, but if alternatives such as withdrawing to a bank account or others are not provided, these changes will not have value.

I am not afraid of such news, you can exchange between bitcoin and altcoins using decentralized platforms and the central platforms will be needed to convert from Bitcoin to fiat money and back.

[DaveF]

The question is what will the other wallets & services do?

Can someone put their funds into a KYC wallet like Binance (picking on them, there are other options) and then withdraw from Binance to someplace else? Since Binance is 'everywhere' and allows user to user transfers, I just see this as a VERY annoying bump but not something that cannot be worked around. Granted, there will be a lot more fees involved.

-Dave

[stompix]

Such conditions will not continue because when you deposit cryptocurrencies, you are depositing them from addresses that cannot be controlled.

They don't care about deposits, only withdrawals.
It's all because AML regulations in which you need to know where the value comes and goes from and who is the beneficiary, in this case when a deposit is made they know individual x is the user, that's all that matters to them. The problem with the withdrawals is that they didn't know when the money left the platform who was getting it for sure. And with this step they can simply pass the blame to the wallet provider, they did their job.

I am not afraid of such news, you can exchange between bitcoin and altcoins using decentralized platforms and the central platforms will be needed to convert from Bitcoin to fiat money and back.

And thus everyone would still be needing to go at least once through this, which kind of defeats the whole purpose of using a decentralized platform after.

I wonder how South Koreans are going to send bitcoin or any other cryptocurrency to people outside South Korea. With this, it may not be possible.

You find a wallet that does KYC, you withdraw to that wallet and then you send coins from wallet B to the person in question. South Korea has some really tough capital control restrictions, that's why all cryptos are
coming with a  premium on their exchanges and everyone runs into bumps when trying to do arbitrage.
Seems like they will accept Binance wallets:
https://support.coinone.co.kr/ko/support/solutions/articles/31000163028

[hugeblack]

And thus everyone would still be needing to go at least once through this, which kind of defeats the whole purpose of using a decentralized platform after.

For the time being, yes, but with the development of decentralized platforms and the ability to use Bitcoin for daily life, we will not need centralized platforms. It will turn into a new banking-like system that provides services for converting bitcoin into paper money and vice versa.

Most of those who use it for trading will look for any central platform that does not require identity verification.

[condoras]

Seems like they will accept Binance wallets:
https://support.coinone.co.kr/ko/support/solutions/articles/31000163028

It was mentioned from the start that any "wallet" that can be verified (meaning have KYC/ AML verification procedure) will be accepted. The point is that you can move your funds between exchanges but not in your wallet. Since these aren't wallets with the exact meaning of a wallet. Plus that they can track easier any coin transfer.

[khaled0111]

Strong resistence is needed to refuse this changes worldwide, but I doubt zombified population have the will and determination to do this.

If they did not mind verifying their identities and sending their personal data to the exchange from the beginning, I do not see why they would protest or oppose this decision now.
But what about exchanges which have kyc but generate a new address for each new deposit, will users have to register the new address each time they want to withdraw? And what about those who want to pay for a service for example?
All this seems pointless and won't stop illegal activities. A user can simply withdraw to a kyc exchange then can do what ever he wants with that money (be it legal or not).

[JeromeTash]

Stupid move by the exchange in my opinion and If i were one of the users from Korea, I would immediately abandon using the exchange. What we are looking at is an attempt to stop user from having full control of their funds.
I just hope people from there boycott coinone and look for better alternatives or else if coinone succeed with their scheme, the rest of the exchanges from Korea will follow the same narrative.

[condoras]

Stupid move by the exchange in my opinion and If i were one of the users from Korea, I would immediately abandon using the exchange. What we are looking at is an attempt to stop user from having full control of their funds.
I just hope people from there boycott coinone and look for better alternatives or else if coinone succeed with their scheme, the rest of the exchanges from Korea will follow the same narrative.

Coinone is one of the "Big Four" remaining Korean exchanges, so I guess that the other three (for those who don't know: Upbit, Bithumb, and Korbitwill) will eventually follow/ "comply" with them.
It's more than certain that they care to track everything from anyone and "control" any possible transaction to places/ wallets my a** that work the same with them. Banking system "on the move"...

[sheenshane]

Stupid move by the exchange in my opinion and If i were one of the users from Korea, I would immediately abandon using the exchange. What we are looking at is an attempt to stop user from having full control of their funds.
I just hope people from there boycott coinone and look for better alternatives or else if coinone succeed with their scheme, the rest of the exchanges from Korea will follow the same narrative.

Exactly and this may result in decreasing their users because of that idea or leaving that exchange much better.

But it made me curious if how they will determine a verified wallet?  This question has come out in my mind quickly but upon reading I saw this which is it made me annoyed about this term.

"Coinone customers need to submit information such as their full name, email addresses, and registered mobile phone number in order to verify their wallets. This information must be the same as the information recorded in Coinone. That means customers cannot register someone else's wallets."

They aren't the only one exchange in Korea, some people that protect their privacy has still other options.

[JeromeTash]

Exactly and this may result in decreasing their users because of that idea or leaving that exchange much better.

But it made me curious if how they will determine a verified wallet?  This question has come out in my mind quickly but upon reading I saw this which is it made me annoyed about this term.

"Coinone customers need to submit information such as their full name, email addresses, and registered mobile phone number in order to verify their wallets. This information must be the same as the information recorded in Coinone. That means customers cannot register someone else's wallets."

It even makes it more of a dick move and will be a complete fail 

Imagine if I want to transfer funds to someone else whose third party wallet details are totally different from mine. It means I can not carry out the transaction since they can not verify the other user's details. Lol!

[Kyraishi]

Seems like that they're trying to move towards a model that is followed by Robinhood/Paypal whereby there is no way of getting your BTC out of the system?

Hopefully everyone realizes that this is a terrible idea and takes the control over their funds out of the user's hands.

They could literally do whatever they wanted with your coins while they are deposited, e.g. lend it out with fractional reserve. In fact, they wouldn't even need any BTC reserves as they will never have obligations to cash you out to your own wallet. This move will appease regulators for sure, but also go against decentralization completely.

[condoras]

Seems like that they're trying to move towards a model that is followed by Robinhood/Paypal whereby there is no way of getting your BTC out of the system?

It seems that's the case and if they started, for sure some other(s) will follow...

Hopefully everyone realizes that this is a terrible idea and takes the control over their funds out of the user's hands.

That's something that people should know it a long time ago. Not your keys = Not your wallet.

They could literally do whatever they wanted with your coins while they are deposited, e.g. lend it out with fractional reserve. In fact, they wouldn't even need any BTC reserves as they will never have obligations to cash you out to your own wallet. This move will appease regulators for sure, but also go against decentralization completely.

The only thing that people can do is to move their funds from there ASAP and when they get them to their new exchange, send them to their wallet. Unless if they want to be tracked for any transaction that they made, with all that entails.

[stompix]

Seems like they will accept Binance wallets:
https://support.coinone.co.kr/ko/support/solutions/articles/31000163028

It was mentioned from the start that any "wallet" that can be verified (meaning have KYC/ AML verification procedure) will be accepted. The point is that you can move your funds between exchanges but not in your wallet. Since these aren't wallets with the exact meaning of a wallet. Plus that they can track easier any coin transfer.

Sorry for the late reply.
I should have added..."for now"

This was triggered by their AML laws, remember that they've stopped licensing a lot of exchanges in South Korea and Binance when it comes to licenses, we all know the saga of HK>Japan>Malta>Nowhere.What's the obvious step? Allow in this circle only the ones that comply with everything!

So while for now, they might accept that, after a while, they will change it as "any" comes with a serious problem and an easy way to avoid this restriction. Somebody could simply set up an exchange, fake some volume on it, and some traffic for real customers when behind that whole farce he would allow any South Korean who pays some money to have them "verified".
How long do you think it will take the SK law enforcement to get really bored going through thousands and thousands of websites till they decide that only the websites that have cooperated with them previously will be allowed in this grand scheme of stopping terrorism?

[Darker45]

They continue doing these absurd requirements, they will die. These centralized exchanges must know that regulations are killing them slowly.

What will happen if a user is to pay somebody else from his/her Coinone wallet? It's going to be invalid because the withdrawal address must be an address registered with the user's name, address, phone number, and so on.

What will probably happen in the next days, weeks, and months is that users will withdraw their funds to a registered address and from that address withdraw their funds to external and other non-KYC wallets.

For better or for worse, these tight and unreasonable regulatory policies are killing these exchanges.

[condoras]

What will probably happen in the next days, weeks, and months is that users will withdraw their funds to a registered address and from that address withdraw their funds to external and other non-KYC wallets.

It's true that this is the only way, if they want to keep their coins anonymously. On the other hand, let's have in the back of our head that non-KYC wallets can always "turn" and start asking KYC, and to be honest, is something that I don't want to even imagine it. But it's a possibility...

[Darker45]

What will probably happen in the next days, weeks, and months is that users will withdraw their funds to a registered address and from that address withdraw their funds to external and other non-KYC wallets.

It's true that this is the only way, if they want to keep their coins anonymously. On the other hand, let's have in the back of our head that non-KYC wallets can always "turn" and start asking KYC, and to be honest, is something that I don't want to even imagine it. But it's a possibility...

Well, non-KYC wallets could either be those custodial ones which are not, or at least not yet, implementing KYC requirement or those non-custodial wallets that cannot impose KYC by their very nature. As regards the former, it's not just a possibility. It is happening one exchange after another. So South Korean users are racing against the clock. They better hurry up and withdraw their funds from Coinone to a registered address from a wallet that allows withdrawal to an unregistered address.

What I fear more, however, is not just the possibility that every exchange will only allow withdrawals to registered addresses but that every crypto-related business, company, and institution that do not require KYC will be deemed illegal and that every Bitcoin deposit should only be coming from registered addresses. That would be messy!

[batang_bitcoin]

It's a pressure from the government and they're telling it to avoid illegal transactions. Well, they have a points if they want to protect their people but we know that it's becoming too much if they're also wanting you to require the receiving wallet to be registered with kyc. It's the first time to hear that. I think it's okay for the users there to comply with the KYC since SK regulators have been strict lately and has been serious with what they're doing. But this type of rule, it's completely odd and who knows if other countries and exchanges might do this in the future as we have already seen the application and possibility of it.